The Office of the Ombudsman has found probable cause to indict former Surigao del Norte Governor Francisco Matugas and former Provincial Budget Officer Ma. Myrla Padayhag before the Sandiganbayan over the alleged illegal transfer and disbursement of P60 million in provincial funds originally intended for disaster response.

In a resolution dated 24 June 2025 and obtained by the Daily Tribune, Ombudsman Samuel R. Martires ruled that the officials violated Section 3 of Republic Act No. 3019, or the Anti-Graft and Corrupt Practices Act, based on a complaint filed by Oscar M. Pospia Jr. on 6 June 2023.

“Evidently, there was no ordinance authorizing Matugas to augment and transfer funds. Hence, the realignment and disbursement of funds amounting to a total of PHP 60 million used in the procurement of the Disaster Risk Reduction – Climate Change Adaptation (DRR-CCA) mainstreamed learning materials and the supplementary learning materials had no basis and, therefore, illegal,” the Ombudsman stated.

Records show that in 2022, the Surigao del Norte provincial government entered into three Memoranda of Agreement with local School Division Superintendents, transferring P60 million to the Department of Education (DepEd) for books and instructional materials for elementary students.

“The funds were deviated from the public purpose from which the said funds were intended. Corollary, the subject MOAs entered into by Matugas with three Schools Division Superintendents were unauthorized and bereft of any legal basis,” the Ombudsman added.

While governors are authorized to grant assistance to national agencies, the Ombudsman said the funds came from the Provincial Disaster Risk Reduction and Management Office (PDRRMO) and were not allocated for DepEd.

Matugas and Padayhag cited a Department of the Interior and Local Government circular to justify the fund transfer, but the Ombudsman rejected the claim, calling it “irrelevant” because the PDRRMO—not DepEd—was the implementing agency.

Their argument that they acted in good faith was also dismissed.

“This argument lacks defensive value considering that the mere act of diverting public funds from purposes other than for which they were originally intended consummates the crime regardless of the lack of criminal intent,” the resolution read.

Complainant Pospia Jr. said the diversion took place in March 2022, just two months before the national elections, and while the province was still reeling from the devastation of Super Typhoon Odette in December 2021.

He said the funds should have gone toward emergency relief and rehabilitation in the worst-hit areas.

“At that time of devastation, we needed roofs over our heads, clean and safe drinking water and classroom repairs, yet while we were in terrible anguish, the assistance given were storybooks of ‘Joy Joy the Jolly Boy,’ ‘Mimi and the Mouse,’ and other similar books for school children,” Pospia said.